1.1 Background of the Study
The major source of per capital output in any country; whether developing or developed, with a market economy or centrally planned is an increase in productivity. Per capita output growth is however an important component of economic welfare, (Abramowitz, 2001). From experience, it has been revealed that human beings are the most important and promising source of growth in productivity and economic growth. Equipment and technology are products of human minds and can only be made productive by people. The success of any productive program depends on human innovative ideas and creativity. The impact of human capital development and economic growth in recent times emphasized the growth theory (Romer, 2006; Lucas, 2008). An interesting idea in their work was that in the long run, output per unit of input could increase even when inputs were exhaustively accounted for.
Technically advanced human capital and a growing knowledge base appear to be part of this wellspring of growth. An implication of Lucas’ hypothesis on human capital is thus associated with investment in man and his development as creative and productive resources (Harbison, 2002).
As the global economy shifts towards more knowledge-based sectors (e.g. the manufacture of ICT devices, pharmaceuticals, telecommunications and other ICT based services, R&D), skills and human capital development becomes a central issue for policy makers and practitioners engaged in economic development both at the national and regional level (OECD,2006); yet the impact education and vocational training activities exert upon changing national and regional economies remain less than thoroughly explained and analyzed. Since the introduction of human capital theory in the 1960s, a number of studies have attempted to address this and related issues. Today, the global economy is divided into two parts comprising of a few rich nations regarded as the developed countries (DCs) and many poor nations regarded as the less developed countries (LDCs). DCs are characterized by high productivity while the LDCs are characterized by low productivity. According to the level of human capital development and per capita income, Nigeria is classified under the LDCs.
Nigeria as a country is immensely endowed both in natural and human resources. The pool of resources from one end to the other is unquantifiable to such extent that, given a dynamic leadership, economic prosperity would have been achieved in late 20th century. The primary focus of Nigeria has been finding a way to accelerate the growth rate of national income and to engage in structural transformation of her subsistence and resource based economy to a production and consumption based economy in order to break the cycle of poverty, low productivity and stagnation.
In spite of all these abundant resources, Nigeria has failed to realize her full development potential with the topmost priority currently given to sustainable human capital development or people oriented development by many countries and multilateral organizations, e.g. UNDP. A review of the Nigerian economy has become quite appropriate as a way of understanding more comprehensively her human capital development.
Human capital refers to the abilities and skills of human resources and human capital development refers to the process of acquiring and increasing the number of persons who have the skills, education and experience which are critical for the economic growth of the country (Harbison, 2002). Therefore, what really matters in Nigeria are the empowerment of people and the mobilization of economic surplus into productive investment channels. There is also the need for the Nigerian economy to eliminate or minimize those constraints towards human capital development so as to enhance rapid economic growth.
1.2 Statement of Problem
In Nigeria, the rate of illiteracy is very high. Most of the workers are unskilled and they make use of outmoded capital, equipment and methods of production. By implication, their marginal productivity is extremely low and this leads to low real income low savings, low investment and consequently low rate of capital formation. It was indicated on the document that adult literacy rate of at least 65% would be attained by 2008. Therefore the strategy aimed at empowering the citizenry to acquire the skills and knowledge that would prepare them for the vast challenges. Overtime, the following issues relating to the concept have remained unresolved: Uneven distribution of skilled manpower, Poor reward system retarding the acquisition and development of human capital.
1.What isthe structure of human capital development in national economic trend?
1.4 Objectives of the Study
The broad objective of this study is to evaluate the impact of human capital development on economic growth in Nigeria.
The specific objectives are as follow:
The following hypotheses are formulated to provide the lead for this study:
Hypothesis One
Ho: Human capital development is not influence by national economic trend.
H1: Human capital development is influence by national economic trend.
Hypothesis Two
Ho: Human productivity do not affect human capital development
H1: Human productivity affect human capital development
Hypothesis Three
Ho:There is no significant relationship between human capital and economic growth.
H1: There is significant relationship between human capital and economic growth.
1.6 Significance of the Study:
The study of this nature is prompted by the slow rate of Nigeria’s economic growth despite the huge contribution of the government. Researches on this topic being carried out over the years have not really achieved its prior objective. The effect of human capital development on economic growth holds a lot of benefits to our overall economic progress. The government and its agencies will find this work resourceful in formatting policy, directives and regulations for human capital development to aid economic growth.
1.7 Organization of the Study
This research work is divided into five sections; section one comprises of the introductory background of the study. Section two covers the theoretical framework and literature review while section three majors in the research methodology; section four is discussion and interpretation of results. Section five then covers the summary of findings, conclusion and policy recommendations.